Involve All Employees in Compliance Program
By Tyson M. Avery
Tony Stark, hero of the summer blockbuster hit Iron Man, is CEO of the high profile defense company Stark Industries. Tony channels his brain power, bravado, and love for things that go boom and creates a deadly “cluster missile” (Jericho) for the U.S. military. Unbeknownst to Tony, his long-time friend and second in command at Stark Industries, Obadiah Stone, betrays Tony and sells the deadly Jericho to U.S. enemies and terrorists. Tony later is severely wounded by one of his company’s own Jericho missiles.
Tony’s misfortune could have been avoided if Stark Industries had put measures in place to prevent illegal sales of the Jericho. His company needed an ethics and compliance program, as do real-world corporations.
An ethics and compliance organization that operates in the “ivory tower” will never promote accessibility. Galvanizing employees at all levels of the organization, from the board room to the mail room, will pay off in huge dividends.
Tasking senior management is vital. Executives lead by example — for good or bad. Corporate leaders who actively understand this focus their words and actions to promote ethical conduct. Leaders being good citizens is not enough. They must proactively communicate the ethics and compliance message to the company as a whole.
The ethics and compliance program must be made a top priority to ensure its effectiveness. This often means creating a position for an ethics and compliance manager and embedding that position into the leadership staff. A compliance manager will have direct access to an organization’s board of directors, president and key leaders. The compliance manager should brief senior leaders as a routine aspect of operational meetings. The compliance manager should also be involved in decision making processes of the organization.
Interaction with middle management and front-line supervisors is equally important. These leaders are actually in the best position to influence the behavior of individual employees. Not only can they create an ethical environment at the shop floor level, but they can also encourage employees to come forward with possible ethical or compliance concerns. The rank and file must be comfortable openly questioning ethics and proper conduct. They also must be well-trained to spot compliance issues, and know how to follow-up when they become aware of a potential violation.
Mid-level managers must prioritize an ethics and compliance program in order, proactively, to prevent violations of laws and regulations. Reacting to violations, even effectively reacting, simply comes too late.
Apart from the importance of working with all levels of management, to deploy a successful ethics and compliance program, contact with the everyday employee is a must. Most violations of law occur at the employee level, often inadvertent or from a lack of information. Committing the effort to ensuring that each employee knows the rules and where to go in case of concern is pivotal in reducing violations. A company’s values should be designed with an eye towards the personal values of the employees.
Outreach to employees can and should occur through a wide array of communication formats. Most effective are in-person training sessions and discussions. Not only should these be conducted by members of the ethics and compliance staff; but all levels of management can incorporate compliance themes when addressing employees. Almost nothing has a greater impact than when a top executive kicks off a training session. The compliance staff can also make a significant impact by walking the floor and promoting conversations on relevant topics. Additionally, using pre-existing company communication tools can keep ethical behavior on the front burner. An “ethics corner” in your company’s magazine or compliance posters in the lunch room are examples of helpful ways to reinforce the organization’s commitment.
When an employee comes forward with a concern or allegation, it is imperative, regardless of the ultimate merit, that such reporting is visibly and openly encouraged by the company. Someone should be designated to keep the employee informed as the issue is investigated. Unless confidentiality is requested (and such requests should always be honored), efforts to keep the employee engaged will not go unnoticed by other company employees. This in turn encourages others to raise issues without the fear of retaliation with confidence that any reported concerns will be respected, and adequately addressed.
If you want to learn from Tony Stark’s mistakes, enlist the entire workforce, and you’ll keep your company in compliance and its products and technology safe. You also won’t need to call Iron Man to the rescue.
Tyson Avery is senior counsel and director of ethics and compliance at ITT Defense. The views expressed are solely those of the author. Lawyers at the law firm of Greenberg Traurig, LLP (www.gtlaw.com) provided editorial support for this article.